Inside Scoop: Will acquiring Nokia devices give Microsoft an edge?
-Hello and welcome to Inside Scoop.
I'm Sumi Das.
We are trying something a little bit different today because we are in 2 different locations.
Joining me via Skype this time is Josh Lowensohn, Senior Writer for CNET.
Josh, thanks for being with us.
-Great to be here.
-So Microsoft and Nokia are all over the news at the moment.
Microsoft is buying Nokia's handset business.
Should this come as a surprise?
-The deal between the 2 companies is valued about
7.2 billion dollars.
Most of that is with Microsoft acquiring Nokia's phone business.
The rest of it is kind of some of the patents and intellectual property that Nokia owns which is pretty substantial.
If you look at it they have 8,500 patents that Microsoft is now getting.
They're also getting licenses from Nokia's deal with Qualcomm, and they can use all those across all their products.
This is very similar to what happened with Google about Motorola.
A lot of people expected that that deal
was less about the hardware as much as the intellectual property which is in defense against other companies that might sue them.
It also kind of lets them bring over some ideas that Nokia was building into its phones and all sorts of products from tablets to computers into the very core of the software.
So it's pretty interesting when you look at it like that.
-For folks who haven't read about the acquisition can you share the details, how much money are we talking about here, how big of a deal is this?
-This really can come as so much of a surprise to you.
know this big deal between the 2 companies happened in 2011 and it was kind of expected then that there would be a merger at some point.
So this is really kind of a completion of that deal that began a few years ago.
And it makes sense in a lot of ways for both companies.
You have Microsoft which has this huge kind of interest in getting back in the smartphone market after kind of really faltering and failing to catch up with companies like Apple and Google, and you have Nokia which also is falling away but is really kind of hedged their bets with Microsoft and
put a lot of their momentum into developing phones for that company.
-Now we do know that recently Steve Ballmer announced he would be retiring.
So a lot of people are turning the conversation towards who might step into the CEO seat.
Some people have named Stephen Elop who runs Nokia as a top candidate.
Is that a possibility?
I mean right now Elop is looking like the prime candidate for this spot.
He of course is a Microsoft veteran and left Microsoft to go run Nokia basically.
So if you look at some of the
experience there, he knows the culture.
He knows how it works.
Of course a lot of things have changed since he's left.
He's also been deeply involved with their product with Windows Phone.
Nokia really has pushed all their momentum into creating devices for Microsoft's platform, and this is someone who knows the company pretty much inside and out because he had experience there.
-So what does this mean for Nokia and Microsoft customers?
Will we see more commonalities between the 2 companies?
-I think there's a ton of commonality between the 2 companies now especially
when you look at some of the direction that can go now and blending those hardware and services together there really weren't any doubts that Nokia kind of had the inside track of what Microsoft was working on because of their partnership and how strategic it was, but now it's gonna be even more implanted and kind of important for Nokia too.
I mean I can't see them at this point making devices for anybody else.
They're all Windows Phone now.
That's pretty clear.
And also when you look at this it's not just phones.
It's tablets too.
One of the areas where Microsoft has
kind of fallen behind especially with kind of the non-success of the Windows RT Surface device.
So if you look at somebody like Nokia they have the hardware know-how to really create that kind of product that might fit in that.
We've already seen some leaked shots of that.
So there's a lot of expectation these 2 companies are gonna come together and make more than just phones.
-Now you mentioned that Microsoft has fallen behind.
Certainly they have when it comes to tablet sales, Windows Phones.
give them an edge?
Can they increase their market share as a result of this acquisition?
-There's really no doubt that these 2 companies coming together is gonna create a much stronger 3rd-place contender against Apple and Google than any other company has.
I mean the big competition for 3rd place is really between Nokia and Blackberry.
Of course Samsung also makes devices but almost everything they do is Android.
They're of course working on their own operating system called Tizen which, you know, I
think is expected soon, but they're not ready to run with that yet.
So this is really a key thing for Nokia and Microsoft to be working on a single platform and for customers really to have one choice as far as it comes from those 2 companies.
So I think if you expected a Windows mobile to kind of die off, this would kind of fluctuate any worries about that.
So there's a lot of benefit for consumers that these two are teaming up, you know, really bringing that 3rd place spot and really tightening it up and hopefully expand it with other products.
-All right, Josh.
so much for being with us.
For Inside Scoop I'm Sumi Das.
Thanks for watching.